July 27, 2010

Summer Segmentation: Cyber Monday

If you've followed my blog over the past four and a half years, you know all about my long-standing detest of Cyber Monday, a online retailing event contrived by a leading trade organization to encourage shoppers to take advantage of margin-eroding discounts and promotions that benefit promotion of the trade organization that invented the holiday.

Without evidence to the contrary, I assumed that customers who purchased via discounts and promotions on this contrived holiday would not repurchase in the future.

So, I created a segmentation variable for a client called "Cyber Monday". Any customer purchasing on Cyber Monday received a "1", all other customers received a "0" for Cyber Monday purchasing history.

I plugged this variable into a statistical model ... and after controlling for recency and frequency/monetary-value and a host of other variables ...I learned that past purchases on CyberMonday were not detrimental to subsequent customer value, no positive or negative influence was detected (the variable had a small, negative coefficient, but it was not statistically significant).

So do some due diligence ... create your own Cyber Monday variable, and see if it has a positive, neutral, or negative influence on the long-term value of customers. Don't read opinions and assume that the opinions are truthful, prove a hypothesis for yourself, for your business!

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Kevin Hillstrom, President, MineThatData

Kevin is President of MineThatData, a consultancy that helps CEOs understand the complex relationship between Customers, Advertising, Products, Brands, and Channels. Kevin supports a diverse set of clients, including internet startups, thirty million dollar catalog merchants, international brands, and billion dollar multichannel retailers. Kevin is frequently quoted in the mainstream media, including the New York Times, Boston Globe, and Forbes Magazine.

Prior to founding MineThatData, Kevin held various roles at leading multichannel brands, including Vice President of Database Marketing at Nordstrom, Director of Circulation at Eddie Bauer, and Manager of Analytical Services at Lands' End.

You may contact kevin at kevinh@minethatdata.com.

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